Our 2014 Finances Exposed!

2014 is in the books so it’s time to take a look back at our finances for the year. In a previous post, Our Finances Exposed we gave a synopsis of our finances for 2011-2013, and in Revealing Our Monthly Budget we gave more detail about what we spent from month-to-month in specific categories plus our budgeting philosophy. Check those out first if you haven’t read them before, as they will be helpful for context as we dive into our 2014 numbers here.

Why Share So Much?

Many people have asked us why we’re so open in sharing our numbers like this, especially since we’re rather private people. Talking about money is taboo in most of US society, so it’s no wonder that people are surprised. We share our personal financial information for the simple reason that we feel it is the best way to actually help people. I can share theories and principles until I’m blue in the face, but there’s so much more power in saying, “This is what I ACTUALLY do.” Then the influence is further compounded when I can show through the objective measure of our real-life numbers our actual (hopefully successful!) results.

To say the same thing in an utterly non-politically correct way, we’re tired of hearing the wimpy, namby-pamby, complainy-pants excuses of people who lose control of their money (and consequently their lives). “It’s impossible to live on a budget!” “I’m too poor to give!” “I don’t have rich parents!” “My debt’s no big deal, everyone’s in debt!” “I have to spend money to have a life!” “It’s the government’s fault!” “It’s the economy’s fault!” “It’s everyone else’s fault!” “Poor me! Life’s so unfair!” “Blah, blah, waah, waah!” Rather than tear out our hair over the feigned financial victimhood we hear all the time, we thought we should just lead by example. People don’t need to be just like us (have mercy!), but by sharing our numbers, perhaps we can help bust this crazy myth that life is “so tough” for the middle class in a modern-day affluent country.

2014 in Review

A little background on our year:

In 2014, both Deb and I continued working full-time in our respective nonprofit organizations as in 2013.

2014 was also the first full year of collecting rent from the small guesthouse on our property.

We did a fair amount of traveling this year. Our rough tally showed that we were on the road for about 3 months of the year, and the vast majority of that was business travel.

Summaries of our situations in 2013 and 2012 can be found in the previous post: Our Finances Exposed

2014

2013

2012

Total Income:

$70,464

$65,741

$42,523

Tithe/Charitable Gifts:

$15,842

$14,284

$8,901

Living Expenses:

$15,992

$18,264

$16,663

Net Income (Saved):

$38,630

$33,193

$16,959

Percentage Saved:

55%

50%

40%

2014

2013

2012

The income numbers represent after-tax income.

Tithe/Charitable Gifts is the single largest expense in our budget so we break it out in order to give an accurate picture of what we spent to live. We practice the Biblical principle of tithing so we give 10% to our church, then after that we give another 10% to other ministries and charitable causes.

Notice that even though our income increased from year to year, our living expenses did not. The percentage of income spent on living expenses decreased in 2013, and the absolute amount spent in 2014 was lower than BOTH 2013 and 2012!

Yes, you read correctly that it cost less than $16,000 for the two of us to live in 2014. This includes all living expenses: Food, insurance, mortgage payments, running/maintaining the car, gifts, recreation, and everything except our business travel.

Moreover, notice that the amount we spent to live was only $150 more than what we gave away for the entire year. In other words, what we gave away pretty much equaled how much it cost us to live. We were pleasantly surprised to see that.

We saved 55% of our income, with all of that excess primarily going to pay off our house. Based on my calculations, it is slated to be paid off sometime this year, or about 2 years after we signed on the dotted line.

Includes our groceries, but not eating out. Dining out is classed under “Recreation”.

Recreation

$356.99

$29.75

Includes: Eating out, gifts for people, and fun things.

Total:

$15,992.19

$1,302.19

The Scoop

So how do we keep our living expenses so low? Well, we’ve been sharing some of our strategies steadily through the past year, so here’s a quick review along with some links to previous articles on the subjects:

Mortgage – Our monthly mortgage payment is only $607.24. That’s possible because we had a massive down payment when we bought the house and we scored a nice 3.49% fixed rate. You can read about it in our post: 7 Lessons as One-Year Homeowners: And paying it off in less than 3 years. What’s amazing is that once our mortgage is paid off sometime this year, that will slice nearly $7300 off our living expenses per year. Meaning, we can potentially live for UNDER $10,000 a year!

Water – Our monthly water bill has consistently been $10 every month since we moved in. This held true even when we had guests stay at our house. Check out our strategies on saving water in our post: How to Save Water.

Groceries – It may seem outrageous, but our food budget actually DECREASED from about $58/month in 2013 to $50/month in 2014. This can largely be attributed to the fact that we grew a bunch of food in our garden, plus we were on the road for nearly a quarter of the year. It wasn’t necessarily a goal of ours to cut our food budget anymore, but it just turned out that way. Check out Deb’s popular series on Eating for 90% Less than Your Neighbors for a full breakdown on our grocery strategy and check out these other helpful tips on shopping:

Recreation – It’s true, we don’t go out very much and when we do, it’s usually to do free stuff. What can I say? Entertainment and other such things are discretionary for us, and we’re just wired to enjoy saving money much more than spending it. Want proof? Check out how we celebrated our anniversary this past year: A Special Anniversary Weekend – Crumb Saver Style.

Conspicuous Absentees

There are two common categories of things that don’t exist in our spending and they are 1) Subscriptions (gym memberships, music subscriptions, TV subscriptions, magazine subscriptions, etc.) and 2) Consumer Debt (credit cards, car loans, student loans). These types of things are not only leeches to your finances, but they can be downright cancerous! Pay off your debt, cancel as many subscriptions as you possibly can, and you’ll be surprised how much you can free up your cash flow.

One Last Thing…

2014 was certainly a successful year for us in our financial goals. We spent less, gave more, saved more, and enjoyed it more than ever. And one big reason why is because of…YOU! You readers out there with your encouraging comments, earnest questions, and genuine interest have helped us stay the course. Not to mention, you’ve helped keep us accountable to actually practice what we preach! So THANK YOU for sticking with us and keeping us honest.

Love what you guys are doing here!!! The more we work at it, the more learn just how little we can live on. I think it’s great that you guys are setting an example for so many by sharing what you do and proving that it can be done! Great job on the charitable giving as well. 🙂

Thank you for your honest sharing! It is truly inspiring. I will be honest and say that our family of 5 lives off of $32,000 a year, before taxes. We are able to save every year, even purchased a 2009 AWD Sienna last summer with cash. But now, I am more inspired to crunch the numbers to see how much less we can spend, and how much more we can save and share. There is always room for improvement!

It sounds like you guys probably live well below the $32k that you mentioned if that’s pre-tax and you’re still able to save on top of that. Some of the super-frugal weirdos I’ve read about online are around the $25-30k range for a family of 3 or 4…so you’re already doing very well! But yes, there’s always room to improve. 🙂

Smarts and humor, eh? What would we have to pay you to throw in “good looks” too? 😉 We kid of course, but we do appreciate your kind words. We’d LOVE to post more, but that would mean less time at our jobs where we actually get paid. As much as we love to pinch pennies, we do need to earn some before we’ve got any to pinch!

PS would love to hear more about your experience renting out the guesthouse. My parents are currently building a little garage apartment in my backyard … we’re going to have a lot of fun together, but I know that someday down the road that little apartment will sit empty and I will be thinking about rental income. Maybe after you’ve had enough experience to give us some tips!

That’s a great question, Lesley. Our real estate rental experience is still paltry, and we have a slightly different scenario in that our guesthouse is actually rented out to the nonprofit that I work for right now as office space. It’s hard to beat since I can keep a close eye on it plus I get to walk to work. We consider ourselves very fortunate for such an arrangement. Certainly not a typical situation for most people. Nevertheless, I’ve still be learning about land lording and should share a few tidbits sometime.

Great job! It is especially heartening to see your choice to double your tithe. Have you kept track of how much food you’ve grown? It would be interesting to see how many pounds of food you’ve been able to grow and how much you’ve paid for it (gardening expenses divided by pounds of homegrown produce.) Maybe you have already calculated this elsewhere?

More nosy questions: are your trash collection and sewer fees included in the $10 water bill? I know water bills vary considerably from place to place but ours has a minimum a lot higher than that bc of the sewer and trash included in the bill. Do you collect rainwater for the gardening? See, here you thought you were over sharing and I am still managing to be even nosier.

Lots of good questions! Amazingly, we did not keep track of how much we grew this past year. (I know, shame on us.) We were traveling quite a bit and seemed to always be giving things away so they don’t go bad. We are slated to be on the road even more this upcoming summer, so I don’t know how much better we’ll be able to do in 2015. 🙁 We actually chose not to pay for trash collection because we generate so little waste that we can usually pitch the one grocery bag-ful each week when we stop at the gas station. We have no sewer fees because we are on a septic system at our place. But the $10 does include the water bill for both our house and guest house. We don’t collect rainwater for the simple reason that we get PLENTY of rain here. Besides watering some around planting time, I pretty much never have to water the garden. We do have a sizable pond in our backyard, so I guess we do sorta collect rain water that way?

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Meet Deb & Al

She's a bargain hunter and he's a numbers nerd. Together we're a husband and wife team who believe that by living an intentionally frugal life, the door flings open to a truly fulfilled existence. Read More…

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